Deputy Commissioner of Taxation v State Bank of New South Wales

The case before the High Court of Australia involved the Deputy Commissioner of Taxation and the State Bank of New South Wales. The dispute concerned the nature of a tax imposed by a statute, specifically whether it constituted a tax on property or a tax on the use of property, which has implications for constitutional immunity.

The central legal issue before the court was to determine the characterisation of the tax in question. This involved ascertaining whether the tax was imposed on the ownership or occupation of land, or whether it was a tax on the business conducted on that land, or on the proceeds of sale of property. The court was required to distinguish between taxes that are considered taxes on property, which may attract constitutional immunity, and those that are not.

The court's reasoning, as indicated by the references to the Supreme Court of Canada and the Privy Council decision in *Canadian Pacific Railway v Attorney-General for Saskatchewan*, focused on the substance of the tax. It was explained that a tax on the "business" was, in essence, an assessment and taxation of a person in respect of land or a building occupied for business purposes, rather than a tax on the act of doing business itself. The court drew an analogy to land tax, concluding that in both instances, the liability was imposed upon a person in respect of land owned or occupied. This approach suggests that the court applied the principle that the constitutional characterisation of a tax depends on what is being taxed, rather than the description of the tax or the method of its collection. The court also considered whether a tax on the proceeds of sale of property is equivalent to a tax on the ownership of property, or if a distinction exists between a sales tax and a tax on the transaction of sale.